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WeChat Pay
WeChat PayRPRPRP WeChat is a social media app developed by Tencent. It is the biggest social media apps in the world with 1 billion active users. Basically, WeChat is a Whatsapp + FaceBook + Skype + PayPal + many more. WeChat Pay is a feature of the WeChat app. WeChat Pay will only work when the user's phone is connected to the Internet and only user of WeChat app is able to use WeChat Pay. WeChat Pay has three major components: 1) Payment 2) P2P remittance 3) P2P broadcast remittance - grab red packet Payment There are 3 modes: 1) User scans QR Code of the merchant to pay. This mode of payment can be used for online shopping whether the website will pop up a QR Code for scanning or offline shopping where the merchant has a physical signboard with the QR Code. Some Internet connected POS (point of sale) system may also generate a QR Code. Physical QR Code signboard will need manual key in the amount while web and Internet connected POS generated QR Code will show you the amount to pay automatically. 2) Merchant scan user's QR Code. User may display its QR Code for payment.in the WeChat App, 3) Initiating WeChat App from another app P2P Remittance The recipient must also be a WeChat user. P2P Remittance can be achieved in the message box just like sending a photo or a file or a smiley. Red packet. There is no difference between P2P Remittance and red packet transfer save for the icon for red packet looks better. P2P Broadcast Remittance A Wechat user can broadcast a red packet to a group of recipients. The system will break it up to random fractions of random size, for example, S$200 red packet may be broken down to one S$50, ten S$5 and fifty $2. The recipients will need to compete with one and another to grab the red packet. Whoever reacts faster has a higher chance of getting the bigger fractions. Slow reaction may end up getting nothing. This feature is the single reason why WeChat Pay becomes popular. Because of this feature, the majority of the people in PRC will be glued to the mobile phone on Chinese New Year Eve. Where the money come from? Real money can be transferred to the WeChat account wallet like in PayPal. WeChat user can also linked his or her WeChat account with an actual PRC bank account . When making a remittance or payment, the user will select either to pay from the WeChat wallet or from the bank account. WeChat Wallet The user may transfer money in WeChat wallet to a linked PRC bank account. Admin charge is 0.1%. Tencent cannot be doing all these for free. PRC Bank Account One would need a a PRC bank account with a ATM card or credit card to be able to link to WeChat pay. Unless one receive remittance from another user, he or she will need a PRC bank account to transfer money to WeChat wallet. KYC WeChat Pay use the PRC bank account as a KYC mechanism. Under PRC laws, all payment accounts without going through KYC will have a maximum pay out limit of Rmb 1,000 (per lifetime). Under PRC laws, all such payment accounts without enhanced KYC will have a limit of Rmb 100,000 per year. Since WeChat Pay does not support enhanced KYC, Rmb 100,000 per year is the maximum legal limit an user can transfer money out. Popularity of WeChat Pay Save for Alibaba group (eg Taobao), almost 100% acceptability. Some merchants will only accept WeChat Pay and not cash. Alibaba group refuses to allow WeChat Pay because it operates the competitor payment system, AliPay. Since P2P remittance is possible, merchants do not have to register themselves with Tencent before they can collect payment, and merchants do not need a POS be able to accept payment. The Merchants platform offered by Tencent has other features at the cost of 0.6% admin fee.